Getting a Payday Loan

[JoeP]

Rich people and the middle class don't use payday loans because they HAVE alternatives. Honestly, if you are very poor and have very bad credit, no credit cards, nothing of any value you can sell for a quick buck, and your family and friends are in just as bad of shape as you are, what alternatives are there? I'd like to see payday loans better regulated. I think they can be detrimental if abused, but they have honestly saved my ass more than once. I'd hate for there to be no options at all.

Maybe as a society, we could find ways to address the root causes that result in people "needing" to go to payday lenders. The LAST thing people in dire straits need is a debt instrument (and payday lenders are the worst of the worst), because there is a good chance they do not fully understand the terms, and debt could very well be the factor that got them into their current situation.

[Nika]

Yes, payday loans prey on the poor and the ignorant. And so does the Taco Bell and hundreds of other companies. Can we shut all of them down and only leave those that are good for us? I'm game.

[hamchan]

People likely did all kinds of things to get by before payday loans were available, some of which are far worse options. Loan sharks, prostitution, shoplifting... Or they just were not able to solve the problem and were evicted or them and their kids went to bed hungry or had no lights or no heat.

[disneysteve]

People likely did all kinds of things to get by before payday loans were available, some of which are far worse options. Loan sharks, prostitution, shoplifting... Or they just were not able to solve the problem and were evicted or them and their kids went to bed hungry or had no lights or no heat.

I certainly don't want to see people starving or living on the street or turning to illegal activity, but I also don't feel that predatory lending is the answer either.

[hamchan]

I don't really know what the answer is. I started having several expensive medical problems starting at the age of 18, and since I was barely getting by already I could not consistently make payments on the bills. As the bills piled up, the problem got worse and worse. My credit was destroyed before I turned 20. In addition to many other medical issues I was involuntarily committed to the psych hospital at age 20, 22, and 30. I was not correctly diagnosed until I was thirty, and the medications I was given prior to that were inappropriate and ineffective. In some ways they made things worse. I'm sure you can imagine what that did to my employability, my ability to make sound decisions. I've been climbing out of that hole my entire adult life. My family are really nice people and they helped as much as they were able, but they had no money either. I lived far away from them, and there wasn't a whole lot they could do.

[JeffG]

Payday loans are okay when you have unexpected expenses. But obviously the trap most people fall into is they don't think ahead to when the loan will become due and they don't plan out how much money they are going to have to actually pay the loan back after they pay their normal bills.

It's not entirely the lenders fault that these people end up in such situations!

[altcur]

Aren't banks starting to offer these types of loans more often, but with better interest rates? I thought I read that somewhere...

[hamchan]

Aren't banks starting to offer these types of loans more often, but with better interest rates? I thought I read that somewhere...

Wells Fargo does. Once they started offering that I used that service instead of payday loans. You have to have direct deposit to use it though.

[vaughan]

Maybe, Use with caution

So 4 years ago I took out a payday loan and I really really needed it at that time in order to get through a few things. I needed to pay rent. I need to pay off some credit cards. But what I did was set aside some money to buy myself a nice suit. That suit did a great job of getting me employee. I told myself that two weeks after I got that first job I would apply for better job. I did and got one.

That payday loan kind of ended up being the spark to my financial success.

I highly recommend getting one online not visiting places in town. There are numerous reasons why these and more reliable better.

I'm also not recommending these for anyone was any other alternative. I honestly believe you should ask friends family and any fool who will give you money first and this should be a last option.

But some people it's the only option.

[disneysteve]

So 4 years ago I took out a payday loan and I really really needed it at that time in order to get through a few things. I needed to pay rent. I need to pay off some credit cards.

You took out a payday loan to pay off credit cards? CC interest rates max out at about 29%. Payday loans are typically 200-300% interest. How was that to your advantage?

[lorraineb]

You took out a payday loan to pay off credit cards? CC interest rates max out at about 29%. Payday loans are typically 200-300% interest. How was that to your advantage?

Yes, waiting on a reply to this. Plus it's unsecured debt. Why would you take out a payday loan for something that wasn't essential for your well being?

[anaidaa]

One good reason to get a payday loan is to pay your late bills so that you do not have your penalty fees added to the balance of what you already owe. Another good reason to get a payday loan is to cover unexpected occurrences and emergencies. But you must compare interest rates before taking a payday loan.

[disneysteve]

One good reason to get a payday loan is to pay your late bills so that you do not have your penalty fees added to the balance of what you already owe.

I highly doubt any company is charging a 200-300% late fee.

[Petunia 100]

One good reason to get a payday loan is to pay your late bills so that you do not have your penalty fees added to the balance of what you already owe. Another good reason to get a payday loan is to cover unexpected occurrences and emergencies. But you must compare interest rates before taking a payday loan.

The only good reason I can see is if you are on the brink of overdrawing your bank account and being hit with multiple $39 overdraft fees. I can see how a payday loan would be preferable to that.

But otherwise, I think planning ahead makes more sense. Don't overextend yourself with debt, and set aside a few dollars each and every time money comes to you (paychecks, tax refunds, etc.) So when unexpected occurrences and emergencies come up, you can rely on your own savings.

And yes, sometimes life doesn't work quite the way we plan and people don't have any other place to turn. Still, I suspect the majority of payday loans wouldn't be necessary with a little planning.

[hamchan]

I highly doubt any company is charging a 200-300% late fee.

It can make financial sense. Let's say I am 100$ short of having my rent money. My apartment charges a $150 late fee if I pay after the 5th, but I don't get paid again till the 8th. It costs me $15 to borrow $100 from a payday loan place. That is only 10% of what I'd have to pay otherwise.

Or what if I get strep throat and don't have $30 for a doctor copay or $10 for the antibiotics. If I wait four days to get my next paycheck, that is four more days I have to miss work and I do not get sick pay. So if I make $50 a day I am going to be 200$ poorer. Or I can pay $7.50 to borrow $50 and recover four days sooner. Not to mention the pain and misery I've saved myself.

These are the kinds of decisions people have to make when they are constantly living hand to mouth.